Kuwait's Burgan completes $356m bond issue

Bank issues bond to boost capital after deal to buy Turkish arm of EFG Eurobank

Kuwait-based Burgan Bank, which announced on Saturday that it had sealed a deal to acquire Eurobank Tekfen, the Turkish arm of EFG Eurobank, has completed a KD100m ($356m) bond issue.

The ten-year subordinated LT2 bond, callable after year five upon receipt of regulatory approvals, was issued in fixed and floating rate tranches.

The proceeds of the bond will be used to support the bank's capital after acquiring EuroBank Tekfen, it said in a statement.

It added that Burgan Bank would continue its strategy of raising funds from the debt capital markets to strengthen its capital base, diversify its investor base and provide financial flexibility to the bank.

The bank last went to market in September 2010 raising a $400m, 10-year bond.

Burgan Bank said on Saturday that the Eurobank Tekfen deal was worth KD98.88m ($351m).

Majed Essa Al Ajeel, Burgan Bank chairman, said: "This is a landmark transaction, not only for Burgan Bank but also for the development of the local debt capital markets by issuing the bond with the largest and longest tenor to date.

"Since the onset of the global economic crisis, Kuwait's bond market has been starved of quality bond offerings, so it is crucial that local banks help to stimulate supply.

"We strongly believe that a fully functioning and vibrant local bond market is a key element in the development of Kuwait's private sector."

KIPCO Asset Management Company (KAMCO) and Watani Investment Company (NBK Capital) jointly managed the bond issuance.

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